Trade, growth and ‘tough talk’

It was a striking headline in the business news site Bloomberg on August 18 that should have garnered more attention than it did in the Gem State:

“Trump-Friendly Idaho Doesn’t Put America First.”

That does need some explanation. It doesn’t refer to patriotism as such, but rather Idaho’s business practices: Idaho’s economy is doing well, ranking high among strong state economies, because “its largest employers sell the bulk of their products overseas, count the world’s biggest multinational companies among their customers and suppliers, and make most of their money from the technology driving globalization.”

That was Bloomberg’s core conclusion, supported by a raft of data. I found this nugget an interesting contrast: “… the economy of Idaho’s southeastern neighbor, Wyoming, is driven more by domestic industries like metals and mining, which provided 20 percent of its gross domestic product. It was the worst U.S. economy during the 12 months ended March 31, with the largest job and tax-revenue losses and second-worst stock market and mortgage delinquencies.”

Idaho’s international focus should come as no surprise. Governor for the last decade, C.L. “Butch” Otter, has made his international business trips, many to Asia and Europe, highlights of his years in office, understandably since international business relationships have been a big part of what he did professionally back to his days at the J.R. Simplot Company.

Over the last 15 years or so, international exports from Idaho have more than doubled – a remarkable expansion many Idahoans may not even have noticed – according to the Idaho Department of Commerce. Many of Idaho’s larger businesses are involved in export.

None of this is really stunning news; even decades ago, international business was important to Idaho business. Nor is it an outlier nationally; a new poll from the Chicago Council on Global Affairs said that “for the first time since the think tank first asked the question in 2004, more than half of Americans — 57 percent — also agreed that trade is good for creating U.S. jobs.” But about half of Republicans nationally say that trade deals mostly benefit other countries, not ours. The issue becomes of bigger import these days because of attitudes toward trade in the Trump Administration, which voters in Idaho helped put into office.

Consider these headlines over the last month from a range of publications internationally: “Trump is ‘hostile to trade’, says American advising UK”; “Trump may be about to wallop global trade as we know it”; “Trump’s Stalled Trade Agenda Leaves Industries in the Lurch”; “Trump’s Trade Agenda Divides the Nation’s Cities”; “China: Trump trade probe violates international rules”; “NDP trade critic calls Trump’s comments about terminating NAFTA ‘disconcerting’.” Among many more.

The details of trade agreements are where you find the good-or-bad; specific provisions can be beneficial or not. The talk coming out of the White House, though, has emphasized how “we are going to make some very big changes” (as the president said of the NAFTA this spring).

That’s making a lot of businesses nervous. And regardless who got the votes for the presidency last year, it ought to make Idaho economic developers nervous as well.